An unfortunate event in the life of many a pair or couple is a break up, separation or divorce. Sometimes, couples get married too early; sometimes after marrying they fall in love with someone else; sometimes the couple suffers a tragedy such as the loss of a child; and sometimes they suffer financial difficulties which make life together difficult. The couple breaks up. Whatever the reason behind a couple's divorce, there are generally serious financial consequences. This situation even extends to couples who are not married, but who are living together where “palimony” may be awarded.
Part of the financial problem associated with divorce is that associated with any mortgage the couple might have. Now, instead of the couple paying for their home, the couple supports two households with various redundancies in needs (e.g., rent, electricity, utilities). Failure to make payments leads to problems for the financial institution handling the mortgage.
In the US, the judicial system generally administers family law matters such as divorces. The court (or a court ordered commission) splits the marital estate and decides who pays the mortgage, which lives in the home, who is awarded custody of the children, assets, liabilities, and who pays child support and alimony. Even though there may be a court order ordering one member of the pair to pay the mortgage, that person may be reluctant to do so, particularly if he or she is not the one living in the house. Despite its best efforts, the judicial system leaves much to be desired in this highly personal and charged situation.
Besides the judicial system, people have tried various private methods to protect what they perceive to be their assets from the former spouse. Such private means have included prenuptial agreements, trusts, alternate dispute resolution, such as mediation, for splitting the marital property, etc. See, e.g., US Patent Application Publications US 2003/0074231 A1 to Renes et al. (Apr. 17, 2003), US 2003/0200124 A1 to Kiramittchian et al. (Oct. 23, 2003), and US 2005/038681 A1 to Covert (Feb. 17, 2005), the contents of each of which are incorporated herein in their entirety.